This disclosure relates to transaction processing networks and, more specifically, to network-based systems and methods for generating chargeback analytics associated with service chargebacks.
When a user of an account, such as an account associated with a payment card (e.g., a credit card or a debit card), authorizes a transaction to purchase goods or services from a merchant using the account, an acquiring bank (i.e., a merchant bank) reimburses the merchant for the transaction. The acquiring bank then settles those funds with an issuing bank (issuer) of the account corresponding to the payment card or with a third party processor authorized to act on behalf of the issuing bank by presenting the transaction into a payment network. In a process known as clearing, transaction data is moved from the acquiring bank to a payment processor, and from the payment processor to the issuing bank. After clearing, settlement of the final payment occurs. Settlement is a process used to exchange funds between the acquiring bank and the issuing bank (or third party processor) for the net value of a batch of all monetary transactions that have cleared for that processing day.
In some cases, the consumer may request a full or partial refund of the cost of the services or goods. For example, in some cases, the consumer may allege that they did not initiate the purchase (e.g., the purchase was fraudulent). In other cases, the consumer may be dissatisfied with their experience with the merchant, as the goods or services provided by the merchant were unsatisfactory (e.g., were not provided at all, were not provided in part, were not provided as advertised, etc.). These refund requests are known as “chargebacks.” In these examples, the consumer may request a chargeback (also referred to as a first presentment, or simply a presentment) from the issuing bank. The chargeback is used to return the funds to the account corresponding to the payment card. Generally, the issuing bank immediately issues a credit to the account for the amount of the transaction. The issuing bank then sends a chargeback request to an issuer processor, and the request is collected with other requests and submitted in a batch to the payment network for presentment to the acquiring bank. Each time a chargeback is initiated, the issuing bank must pay a fee to get the process started to determine which party will be left with the cost of the purchase of the item or services. Depending on the outcome, the cost of the transaction may be left with the account in question, the issuing bank, the acquiring bank, or the merchant.
Therefore, in an effort to conserve time and resources, it may be beneficial for an issuer and/or an acquirer to identify those merchants that are frequently identified for chargebacks. At least some known chargeback systems may provide some sort of rating of merchants associated with chargebacks, such as the overall number of chargebacks initiated for a merchant. However, these known systems do not filter the chargeback data but rather use all chargeback data associated with a merchant, including fraud-related chargebacks (e.g., which account for over 50% of chargebacks) and non-fraud-related chargebacks. By using all chargeback data, these known systems and their merchant ratings obscure the source of chargebacks associated with the merchant. For instance, a merchant may provide a high level of service but may have had a plurality of fraudulent purchases made therewith. Accordingly, these known systems may rate this merchant with a low score or ranking compared to other merchants, even though the merchant is not at fault and “true” cardholders tend to have good experiences at that merchant. Such systems not only process all chargeback data, which can consume considerable processing time and resources, but provide a general metric that may not service the specific purpose of identifying poorly performing merchants.